FXStreet (Mumbai) – The US dollar kicked-off the week on a bearish note and ran through fresh offers versus its Japanese counterpart at Tokyo open, dragging USD/JPY closer towards 120 handle.
USD/JPY drops from 120.60
Currently, the USD/JPY pair trades -0.16% lower at 120.31, almost 100 pips down from US GDP –led spike. The major gave up entire US Q2 GDP led gains and extends its gradual decent into the early Asian hours, as markets resorted to profit-taking on their USD longs after the recent strength, ahead of the Fed’s closely watched PCE price index due later tonight.
While, the yen remains better bid against the greenback as the Asian stocks appear to have cautious start to a macro-heavy week ahead, with the Nikkei accelerating losses after a negative start. The Japanese benchmark now trades -1.40% lower at 17,633 points while Australia’s trades muted at 5,041 points.
On Friday, USD/JPY was bolstered to fresh two-week highs at 120.26 levels after the US Q2 final GDP figures stood at 3.9% vs. 3.7% expected, adding further to the hawkish Yellen’s comments-inspired rally.
Meanwhile, markets look poised for the NFP-week ahead with major macro data from the US and Japan to dominate the moves on the pair. While Fed policymakers’ speeches will also be closely eyed for fresh cues on the Fed’s interest rate outlook.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.64 (Sept 22 High) levels and above which it could extend 121.02 (Sept 17 High). To the downside immediate support might be located at 119.99 (Sept 25 Low) below that at 119.71 (Sept 21 Low) levels.
(Market News Provided by FXstreet)